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GE Profit Boosted by Industrial Unit but Drop in Oil Creates Ripple Effect

ENLARGE General Electric says revenue in its industrial segment increased 6% to $32 billion in the fourth quarter. Photo: Bloomberg News General Electric Co. ’s oil and gas business managed to blunt the hit from plunging prices of crude but the company is braced for deepening trouble in the year ahead. In the final three months of 2014, orders fell 10% in GE’s oil and gas business, including a 72% decline in requests for such drilling equipment as blowout preventers. The company said it hasn’t yet had to negotiate lower prices for its backlog of orders. But customers are starting to call, as they look to curtail projects, lay off workers and trim costs. “That’s to come in 2015,” Chief Financial Officer Jeff Bornstein said. For the past decade, GE Chief Executive Jeff Immelt has built up a sizable oil and gas operation, which accounted for about 17% of […]

Posted On : Published By : Tom Whipple
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BHI: US rig count falls for 8th straight week, down 43 units

HOUSTON, Jan. 23 01/23/2015 The US drilling rig count fell 43 units to settle at 1,633 rigs working during the week ended Jan. 23, Baker Hughes Inc. reported. That total is the lowest since Aug. 6, 2010, and 144 units fewer compared with this week a year ago. The count has now fallen in 8 consecutive weeks, losing 287 units during that time ( OGJ Online, Dec. 5, 2014 ). Forty-two of the 43 units that went offline this week were land-based, bringing that total to 1,568. Land rigs have plunged 176 units over the last 3 weeks. The other unit to fall was drilling in inland waters, bringing that total to 11. Offshore rigs were unchanged at 54. Oil rigs plunged 49 units to 1,317. Gas rigs gained 6 units to 316. Horizontal drilling rigs lost 24 units to 1,229. Consultancy group Wood Mackenzie Ltd. recently said that, […]

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Wood Mac: US Onshore Well Count to Fall by 26% in 2015

URL: http://www.rigzone.com/news/oil_gas/a/136910/Wood_Mac_US_Onshore_Well_Count_to_Fall_by_26_in_2015 Oil prices under $50/barrel will results in a decline in North American well counts and rig day rates as operators scale back 2015 spending plans. The U.S. onshore well count will decline by 26 percent, from more than 37,000 in 2014 to an estimated 27,000 in 2015, as the decline in oil prices prompted many operators to cut their 2015 spending plans, according to a recent estimate by Wood Mackenzie. North American drilling and completion expenditures exceeded $140 billion in 2014, but Wood Mackenzie expects operators to commit less than $90 billion to upstream development over the next 12 months. “Such sizeable cuts will have serious implications across the oilfield services sector,” said Wood Mackenzie in a statement. Using its North America Supply Chain Analysis Tool, Wood Mackenzie forecasts that rig day rates will decline by 30 percent, while the rig count will drop from an annual […]

Posted On : Published By : Tom Whipple
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Oil Rigs in U.S. at 2-Year Low as Bakken Drillers Bail

Rigs targeting U.S. oil slid to the fewest in two years as explorers retreated from North Dakota’s Bakken formation at the fastest pace since the nation’s shale boom took off. The U.S. oil rig count dropped by 49 this week to 1,317, the lowest since Jan. 25, 2013, Baker Hughes Inc. (BHI) said on its website Friday. The total count fell by 43 to 1,633. North Dakota, home of the Bakken play that doubled its crude output within two years, lost the most rigs since at least 2008 with prices under $50 a barrel. Oil rigs have dropped by an unprecedented 258 in seven weeks, threatening to end the surge in domestic oil production that has turned the U.S. into the world’s largest fuel exporter. The booming production, out of shale formations across the country, has OPEC and other foreign suppliers fighting to preserve their market share. Eight hundred […]

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U.S. Steelworkers to Reject Oil Companies’ First Offer

United Steelworkers leaders, representing employees at about two-thirds of U.S. refineries, instructed members to reject the first three-year contract proposed by companies on Friday, describing the offer as “offensive.” Gary Beevers, the USW international vice president who manages the union’s oil sector, told all local units to turn down the proposal made collectively by companies including Chevron Corp. (CVX) , Exxon Mobil Corp. (XOM) , Marathon Petroleum Corp., Royal Dutch Shell Plc (RDSA) and Tesoro Corp. (TSO) , a telephone message distributed to members on Friday shows. Negotiations between the USW and refiners began this week. The current contract expires Feb. 1. Oil workers are asking for bigger pay raises and better benefits as U.S. oil refiners cash in on the cheapest oil in almost six years. The market value of U.S. refiners has jumped as plants take advantage of a domestic shale boom that has propelled the nation’s […]

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Baker Hughes total US rig count is lowest seen since August 2010

Houston (Platts)–23Jan2015/512 pm EST/2212 GMT The Baker Hughes rotary rig count fell 43 this week to 1,633 total oil and gas rigs working on land and offshore for the week ending Friday — the lowest the count has been since August 2010. Of the total US rig count, 1,579 rigs — nearly 97% — are working on land or inland waters, the lowest number since July 2010 and also down 43 from a week ago, the oil services company said Friday in its weekly data. While that is an abnormally high dropoff for a rig count that has bee generally slow-moving in recent years, it is not as steep as declines earlier this month. For example, the number of land rigs fell by 74 during the week that ended January 16 and 60 the week that ended January 9, Baker Hughes data show. Oil prices that have plunged more […]

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Russian economy in bad shape, minister says

Russia’s economic woes predate crises in Ukraine, minister says from sidelines of the World Economic Forum. Photo by Denis Larkin/Shutterstock DAVOS, Switzerland, Jan. 23 (UPI) — Russian economic woes predate the steady decline in oil prices and sanctions triggered by crises in Ukraine, a Russian minister said Friday from Switzerland. Russian First Deputy Prime Minister Igor Shuvalov said from the sidelines of the World Economic Forum in Davos the Russian economy never fully emerged from the economic crises that ensnared the global economy in 2008-09. "We briskly started to lose our rate of growth and it became clear that a structural crisis was looming," he said. Analysis from the World Bank in December finds the Russian economy will face difficulties through 2016 because of the decline in global oil prices. A January report from the International Monetary Fund said the Russian economy should shrink by 3 percent this year. […]

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Euro’s Big Drop Puts U.S. Economy, Federal Reserve to the Test

European Central Bank President Mario Draghi. ENLARGE Photo: Associated Press The European Central Bank’s launch of an aggressive program this week to buy more than €1 trillion in bonds poses important tests for the U.S. economy and the Federal Reserve. Europe’s new program of money printing—and the resulting fall in the euro—means the U.S. economy must deal with a rapidly strengthening dollar that will make American goods more expensive abroad. The stronger dollar could slow both U.S. growth and inflation, giving the Fed some incentive to hold off on its plan to raise short-term interest rates later this year from near zero. U.S. officials have been playing down that scenario, and, more broadly, resisting talk of a global currency war—competitive devaluations by countries eager to keep their currencies as low as possible to protect exports. The U.S. dollar has already soared in the wake of the ECB announcement Thursday […]

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War Is Exploding Anew in Ukraine; Rebels Vow More

DONETSK, Ukraine — Unexpectedly, at the height of the Ukrainian winter, war has exploded anew on a half-dozen battered fronts across eastern Ukraine , accompanied by increasing evidence that Russian troops and Russian equipment have been pouring into the region again. A shaky cease-fire has all but vanished, with rebel leaders vowing fresh attacks. Civilians are being hit by deadly mortars at bus stops. Tanks are rumbling down snowy roads in rebel-held areas with soldiers in unmarked green uniforms sitting on their turrets, waving at bystanders — a disquieting echo of the “little green men” whose appearance in Crimea opened this stubborn conflict in the spring. The renewed fighting has dashed any hopes of reinvigorating a cease-fire signed in September and honored more in name than in fact since then. It has also put to rest the notion that Russia’s president, Vladimir V. Putin, would be so staggered by […]

Posted On : Published By : Tom Whipple